Apple aims iTunes at U.K.

Launch threatens Brit d'load biz

Apple's popular iTunes TV download service launched Wednesday in the U.K. with a slate of Viacom and Walt Disney Co. programs that threatens to upset the nascent commercial model of the U.K. broadcasters' own online services.

"iTunes will kill broadcasters' download-to-own stone dead unless they come up with device strategies like a Freeview-plus model that links download-to-own to a TV set or portable devices," Screen Digest analyst Arash Amel said.

Apple's Hollywood studio deals to offer such series as "Grey's Anatomy" and "Desperate Housewives" for £1.89 ($3.78) per episode through iTunes U.K. will put pressure on the broadcasters' relationship with the studios. The new iTunes service includes about 28 shows at launch, with some already being offered by U.K. broadcasters on their own pay-to-download services.

Channel 4, Five and Sky, through its Sky Anytime service, have put a lot of effort into setting up pay-to-download sites alongside their ad-supported catch-up services, which are free. According to Screen Digest, in 2006 download-to-own services in the U.K. generated £277,000, a figure that is forecast to grow to £14.8 million ($29.9 million) this year. By 2011, Screen Digest forecasts that the U.K. download-to-own market will be worth £65 million, of which Apple is predicted to take 80%.

On the new iTunes U.K. service, Viacom will offer shows from its MTV, Paramount Comedy and Nickelodeon channels, including "SpongeBob SquarePants," "Laguna Beach" and "South Park."

Disney's U.K. iTunes lineup includes ABC's "Ugly Betty," "Grey's" and "Housewives" as well as Disney Channel's "Kim Possible" and "Mickey Mouse Clubhouse."

Shows can be viewed on Macs and PCs as well as fifth-generation iPods, or on a television using the Apple TV set-top box. In the future, programs likely will be available on Apple's iPhone, which is expected to launch this year in Europe.
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